High-Speed Trading Firm Deleted Some Code by Accident • Hacker News Board

Re: High-Speed Trading Firm Deleted Some Code by Accident

#61

Post by tptacek » Sat, Oct 03, 2015, 1:40 PM UTC

x0054 wrote: post #54

auntienomen wrote: post #38

Earlier quoted context omitted.

Faster trading allows market makers to operate with smaller capital investments. This lowers the barrier to entry in the market making business, creating more competition. More competition reduces the costs of trading. (And not just in theory. Market making used to be exclusively the domain of a few big players. It's not anymore.) Reduced cost of trading matters to almost everyone who's involved in the markets. Passi…

How does HFT help market making? Would a market that operates with a 1 second resolution be inherently unable to provide the same levels of liquidity that we enjoy today? You argument is that Vanguard is a market maker, Vanguard likes HFT, thus HFT must be good. That doesn't really follow at all. Vanguard could be arguing in favor of HFT for all kinds of reasons, one of them could be that they have the money to rent…

Vanguard is like the opposite of a market maker; they're a mutual fund manager. They're the people HFT is ostensibly supposed to be screwing.

See, again, per the article, Chesterton's Fence.

Re: High-Speed Trading Firm Deleted Some Code by Accident

#62

Post by HolyLampshade » Sat, Oct 03, 2015, 3:00 PM UTC

fahimulhaq wrote: post #32

On a related note, Knight Capital lost $440 million due to a software bug a few years ago. http://www.bloomberg.com/news/articles/2012-08-02/knight-has...

Blew up the whole firm actually, and was more closely related to change management policies and systems monitoring.

The SEC order there is an interesting read for anyone involved in large scale transactional systems: https://www.sec.gov/litigation/admin/2013/34-70694.pdf

Re: High-Speed Trading Firm Deleted Some Code by Accident

#63

Post by mathgenius » Sun, Oct 04, 2015, 8:17 AM UTC

smoothgrammer wrote: post #14

mathgenius wrote: post #9

Earlier quoted context omitted.

Yeah, well, f kups happen, you just gotta make sure you are making more money than you lose in those incidents.

Or you just write a test that checks to make sure you don't screw up.

If you're designing a new airliner then yeah, you can't screw up, and you end up taking years to deploy.

In the HFT world, you may have only days, or sometimes hours, to deploy. Yes you still write tests, and a bazillion safety checks when you deploy, but if you manage your risk down to zero then this is definitely not the most profitable way to go.